REPORT 2006

To Shareholders and Investors
Business Report for the 73rd Term
April 1, 2005 to March 31, 2006

Securities Code : 6455

Development of Hazmat Vehicles
At Morita we have been developing hazmat vehicles equipped
to respond to large scale NBC disasters (*1) and havesuccessfully delivered our first vehicle to the Saitama City Fire
Bureau. As a company which has up until now concentrated on
the development of fire-fighting vehicles, this was our first attempt
at developing a hazmat vehicle.
In recent years a number of accidents have occurred at
petrochemical complexes, chemical facilities and nuclear power
stations. Moreover, given the unstable state of world affairs andthe deterioration of public safety, we live in fear of a terrorist
attack involving chemical weapons. Amidst such an environment,
local authorities are rushing to develop measures to handle NBC(nuclear, biological, chemical) disasters in order to protect thegeneral public and are moving to undertake initiatives such as theestablishment of response organisations and facilities, and theimplementation of drills in anticipation of special disasters.
Hazmat vehicles are vehicles called out together with rescue
workers to disaster scenes to which access is dangerous. They
are fitted with positive-pressure air purifying systems with special
filters (*2) which prevent the penetration of toxic substances bydecontaminating the outside air and pumping it inside the vehicle.
First and foremost, gas and chemical substances are collected
and analysed to determine the extent of the pollution using
various measuring instruments installed in the vehicle. The
vehicles come equipped with positive-pressure chemical
protection suits and radiation protection suits needed for clean-up
operations of hazardous materials at disaster scenes and to workat such scenes. They are also equipped with decontamination
showers to prevent secondary disasters. The role of thesevehicles is to perform at the front line of disaster scenes, and it is

REPORT 2006

more than likely that such vehicles will be widely introduced in the
future.
The hazmat vehicles developed by Morita use the latest air
purifiers with special filters which can operate non-stop for up to
48 hours, enabling the vehicles to be used at disaster scenes forextended periods of time. Furthermore, to improve safety, suchdevices are also installed separately inside the cab.
*1- NBC Disaster refers to disasters involving N (Nuclear = radioactive
materials), B (Biologic = biologic agents), C (Chemical = chemical
agents) such as terrorist attacks using biochemical weapons, or
nuclear power plant disasters.
*2- Positive Pressure Systems are devices which prevent the penetrationof outside air by raising the inside atmospheric pressure to levels
higher than outside.

Hazmat Vehicles' General Specifications andMain Standard Equipment■Size : 8000L × 2500W × 3500H (mm)■Gross Vehicle Mass : under 12 t
■Seating Capacity : 7 (2 in the cab, 5 in the chemical laboratory)■Main Standard Equipment :Positive-pressure air purifying system with special filters, mass
spectroscope, infra-red spectrophotometer, biological agent detector,
chemical agent detector, positive-pressure chemical protection suits,hazardous material absorbent, decontamination shower etc.

Introduction of a Scholarship System to Support
Students of the Chiba Institute of Science,
Faculty of Risk and Crisis Management
Starting from this year, Morita has established a scholarshipsystem to support the activities of high-achieving students in
the Faculty of Risk and Crisis Management at the Chiba
Institute of Science(Choshi City, Chiba
Prefecture, Chancellor:Toshisuke Hirano). We
held the first awards
ceremony at the Instituteon February 7, 2006.

REPORT 2006

The Chiba Institute of Science opened in Choshi City, Chiba
Prefecture, in April 2004, and as the first institute in Japan toestablish a Faculty of Risk and Crisis Management it is working todevelop human resources capable of resolving issues in
response to various kinds of disasters and hazards.

+                              .                     /              0( 0"10        2           
      3                                       2  !      % +   0                     *                                 )   ) 0 0  (    0 0  1   %     0                    

Commencement of the sale of
the Fire Fighting Ambulance FFA Security Buzzer
0  )          ''  "  ''" 0 22        4 55 6 5 5 /7     $REPORT 2006

                                                                      !                                          

Registration of Fire Engine Day  
"  #$          %  
  # &                    
' (   )   *  "   "  !  ' (   )          %         *        
                     '                             
+   "  ,      - 
)   *  &  ' '  "  )REPORT 2006

8

TO OUR SHAREHOLDERS /BUSINESS REVIEW虱 Overview of Operations
During the consolidated fiscal year, the Japanese
economy performed steadily in terms of exports andprivate capital investment, and the economy started torecover slowly as a result of improvements in theemployment environment and increases in income.
Amidst such conditions, the various divisions within
the Morita Group resolutely expanded operations andendeavoured to improve the collective strength of thegroup and to strengthen earning capacities byreducing costs and cutting operating expenses.
As a result, in terms of business results for the
consolidated fiscal year, sales of 45,413 million yen wererecorded, an increase in revenue of 3,216 million yen(7.6%) year-on-year. In terms of profits, operating
profits of 3,249 million yen, an increase of 264 million
yen (8.8%) year-on-year, and pre-tax profits of 3,419
million yen, an increase of 346 million yen (11.2%) yearon-year, were recorded. Net profits of 2,101 million yen
were recorded, an increase of 299 million yen (16.6%)
year-on-year.

虱 Overview by Division（1）Disaster Prevention BusinessD i s a s t e rPrevention
Business's sales
increased 1,407
million yen (4.7%)
year-on-year to
31,260 million yen
due to increases in
the Fire Fighting
Vehicle Division's sale of water towers and increases inour subsidiary Morita UG Ltd.'s sales of Sprinex
packaged automatic fire extinguishing equipment. In
terms of profit, operating profits decreased 258 million
yen (8.6%) year-on-year to 2,712 million yen due to a fallin sales of the Fire Fighting Vehicle Division's laddertrucks and aircraft rescue and fire fighting vehicles.

#

REPORT 2006

■Disaster Prevention Business（million yen）
35,000Net Sales
29.85330,00025,76431,26026,60525,00020,00015,00010,0005,000
02003.3 2004.3 2005.3 2006.3（2）Environmental Business
Environmental Business's sales rose 1,651 million yen(12.6%) year-on-year to 14,722 million yen with sales ofsubsidiary Morita
Econos Corporation's
environmental andsanitary vehicles,
including sanitary
vehiclesandgarbage trucks,
recovering slightly
from last year's
special procurement
r
e
p
e
r
c
ussions from
■Environmental Businessemission controls. In terms
Net Sales（million yen）
of profits, operating
20,000p r o f i ts greatly increasedby 528 million yen year15,486
16,00014,722
14,134on-year to 536 million
13,07012,000yen due to increased salesof the aforementioned
8,000
environmental and sanitary
vehicles.
4,000
02003.3 2004.3 2005.3 2006.3

 $虱 Issues to be handled by the GroupIn terms of outlook for the future, given the serious
financial circumstances surrounding local authorities,
our main customers, the high cost of raw materials andtough competition from other companies in theindustry, we expect the current harsh operating
environment to continue. In order to survive in such aharsh environment we are improving the earning
capacity of existing operations by 1) implementing an
operational headquarters system to fully prioritise
earnings, 2) realising cost reductions using ERP(Enterprise Resource Planning), 3) reducing sales andadministration expenses, and 4) reducing interestbearing liabilities. Aiming to make the next leap
forwards, we will expand foreign operations andestablish new businesses by 1) investing indevelopment (high performance ladder trucks, highperformance pumps, double-function vehicles (firefighting ambulances), highly effective fire extinguishingcompressed foam air systems that prevent water
damage, high performance shredders, and the Shokyudan fire suppressant and explosion prevention
grenade), 2) investing in facilities (construction of newplants capable of optimum production), 3) investing inoperations (setting up overseas production bases establishing Morita Vietnam), and 4) investing inhuman resources (new personnel system, in-house
recruitment, education and training).
With the aim of building on existing human resource
training and developing new technology, we have been
moving ahead with joint research in collaboration withvarious universities, and we intend to continue actively
undertaking such research in cooperation witheducational institutes including other leading
universities.
I would like to take this opportunity to ask
shareholders for your continuing support andencouragement.
June 2006

Masahiro Nakajima
President%

REPORT 2006

FINANCIAL HIGHLIGHTS■Net Sales■Ordinary Profit（Millions of yen）
Non-consolidated

50,00040,000（Millions of yen）
Consolidated
45,41342,19741,64339,883

Consolidated
3,249
2,985

3,000
2,645

35,4932,500
30,63530,000Non-consolidated

3,500

27,891

2,257

30,0652,000 1,825
1,500

20,000

1,881

1,781

1,348

1,000
10,0000500
2003.3 2004.3 2005.3 2006.3■Net Income

2003.3 2004.3 2005.3 2006.3■Return on Assets（ROA）（Millions of yen）

（Consolidated）（％）

Non-consolidated

2,500

0

Consolidated

6
6.0

2,101

2,000
1,568

1,500

1,801
1,678

5.4
1,357

1,100

1,000

5
4.7

500
0

4

△500
△1,036△1,000△1,5003.1△1,165

2003.3 2004.3 2005.3 2006.3

3

2003.3 2004.3 2005.3 2006.3■Shareholders' Equity Ratio ■Interest-Bearing Liabilities（Consolidated）（Millions of yen）（％）

（Consolidated）

25,00060

20,000
53.4

52.3

51.0

50

15,00049.0

13,19010,875

10,000

8,182
6,230

5,000
40

2003.3 2004.3 2005.3 2006.3

02003.3 2004.3 2005.3 2006.3

REPORT 2006&

CONSOLIDATEDFINANCIAL STATEMENTS
虱 Consolidated Balance Sheets
Morita Corporation and Consolidated Subsidiaries
As of March 31, 2005 and 2006
Millions of yen

Assets            
   !  
Liabilities and Shareholders' Equity   
"#   !   

2005

2006
￥23,771 ￥22,384

27,083
222
5,164
56,242

26,887
185
9,131
58,59016,866
9,038
25,904

18,884
8,765
27,650

286

280

4,746

4,746

4,346
19,262
1,463
1,185
31,004

4,346
20,336(4)
2,845
32,269$            %   & 
 '(  ) *++, # -.+++++++  *++/ # 0/00.+++   ) 1,2-./1*  (     #      
3    45       
3        # #   !   '  !     & !        & 

(952)(1,610)30,05130,659￥56,242 ￥58,590

虱 Consolidated Statements of Income
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2005 and 2006
Millions of yen

Net sales
Cost of sales

6   Selling , general and administrative expenses7  

Other income
Other expenses
Income before income taxes
Income taxes 
 

$             
Net income

2005
2006
￥42,197 ￥45,413

30,91911,278
8,292
2,985

33,691
11,722
8,472
3,249

866
601
3,251

640
318
3,571

288
1,148
1,436

1,062
408
1,470

12

￥1,8010￥2,101Yen

Per share of common stock           (      

9

REPORT 2006

2005

2006

￥38.58￥45.61

38.52
9.00

45.39
10.00

虱 Consolidated Statements of Shareholders' Equity
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2005 and 2006
Millions of yen

2005

2006

￥4,746￥4,746

4,345
4,346

4,346
4,346

18,556
1,801
(335)
(74)
(686)

19,262
2,101
(432)
(81)
(506)

−

(7)

Common stock:    

4,746

4,746

Additional paid-in capital:    

Retained earnings:                                                    End of year

￥19,262 ￥20,336

虱 Consolidated Statements of Cash Flows
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2005 and 2006
Millions of yen

Cash Flows from operating activities

2005￥1,9282006￥4,676

Cash Flows from investing activities(953)(2,250)Cash Flows from financing activities(3,265)(3,045)Net decrease in cash and cash equipment(2,290)(619)

Cash and cash equivalents at beginning of year

5,238

2,947

−

39

￥2,947￥2,366

Cash and cash equivalents of newly consolidated
subsidiaries,net excluded subsidiaries from cosolidation
Cash and cash equivalents at end of year

REPORT 200610

Nonconsolidated Summary虱 Noncondolidated Balance Sheets
As of March 31, 2005 and 2006
Millions of yen

2005

2006

Assets                  ￥ ￥


 

 

 


 
 
 

  

Liabilities     
Shareholders' Equity         
!  "  #    $ !   $   
          %       % 

 
 
 
 
 

(
 


(
(
 ￥￥ 

虱 Noncondolidated Statements of Income
For the Years Ended March 31, 2005 and 2006
Millions of yen

2005 

Cost of sales 


 


Selling, general and administrative expenses

 


 


Other income
Other expenses
Income before income taxes
Income taxes

 



 

 


'$


 



Net income￥￥ 

(

 $

*   



2006

Net sales

REPORT 2006

虱 Appropriation of Retained Earnings
Millions of yen

2006       $    $   $    $      $ $&     

￥





   

'  %   (          $ )

￥

STOCK INFORMATION March 31,2006
Principal Stockholders (Top 10 shareholders)Common Stock
Authorized
Issued+     
 ' + $     
+!    ,  .    / ,  -  , $   +   01- +      "+  .  .     #
 .  +  ,    1    . , '  , ( 0$ 2   %  +  1   "+  2   .     #

180,000,000 shares
46,918,542 shares
Thousands of
share





 

Voting Right
Percentage
−


 
 


 



 









 



REPORT 2006



CORPOLATE DATA虱 Overview
Founded : April 23,1907
Established : July 23,1932
Representative : President Masahiro Nakajima
Paid-in capital : JPY4,746mil
Osaka Head Office :5-20,5-Chome,Shojihigashi,Ikuno-ku,Osaka City,Osaka,544-8585
Tokyo Head Office :25-31,3-Chome,Nishishinbashi,Minato-ku,Tokyo, 105-0003
Primary Products
Pump Division
Manufacture and sale of fire engines with ladders, chemicaltrucks,ordinary fire engines, other fire fighting vehicles andspecialty vehicles.
Disaster Prevention Division
Manufacture and sale of disaster prevention equipment
including dry chemical fire extinguishers and design,conservation and inspection of disaster prevention facilities.
Environment Business Division
Design of waste recycling facilities and other waste
disposal facilities and manufacture and sale of large
hydraulic equipment.

虱 Group Companies
Morita Econos Corporation

Morita Technos Corporation

Morita Sogo Service Ltd.

Morita Toukai Corporation

Ueno Morita Ltd.

Morita UG Ltd.

Morita Engineering Corporation

ALUVO.CO.,LTD.

Hokkaido Morita Corporation

Kagoshima Morita Pump Ltd.

Morita Toyo Corporation
Sichuan Morita Fire Safety Appliances Limited Company
Nanjing Chenguang Morita Environment Protection Science &Technology Co.,Ltd.

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REPORT 2006

DIRECTORS, AUDITORS ANDEXECUTIVE OFFICERS

Chairman & CEO

Toshio Shinmura

President

Masahiro Nakajima

Executive Vice President

Shigetsugu Demizu

Executive Vice President

Masaaki Onji

Senior Managing Director

Masaoki Shibata

Managing Director

Naoyuki Murai

Managing Director

Eiji AsadaManaging Director

Yukihiro Maehata

Managing Director

Kazuhiko Nakata

Director

Kenichi Kitamura

Director

Kazuhiro Tsuchiya

Full-Time Corporate Auditor

Kyo Hirose

Full-Time Corporate Auditor

Kazunari Nishida

AuditorKazuyoshi Matsumura

AuditorTeruo Nakano

Associate Senior Corporate

Reizo Kitamura

Executive Officer
Corporate Executive Officer

Michihiro Ichihara

Corporate Executive Officer

Toshihiko Iwamuro

Corporate Executive Officer

Akira Koga

Corporate Executive Officer

Fumikazu Hashimoto

REPORT 2006

"虱 Shareholder’s Memo
Operating Year : April 1st to March 31st
Annual General Meeting of Shareholders : June
Schedule : Ordinary General Meeting of Shareholders – March 31stYear-end Dividend – March 31st
Interim Dividend – September 30st
Other dates publicised in advance as necessary
Method of Publicity : Posted on company website.
http://www.morita119.com/kohkoku/index.html
Shareholder Register Administrator :The Sumitomo Trust & Banking Co., Ltd.
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka
Administrator’s Office :The Sumitomo Trust & Banking Co., Ltd. Stock Transfer Agency Department
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka(Postal Address)
The Sumitomo Trust & Banking Co., Ltd. Stock Transfer Agency Department
1-10 Nikko-cho, Fuchu City, Tokyo 183-8701(Telephone Enquiries)(Requests for change of address forms) +81-120-175-417(Other enquiries) +81-120-176-417(Internet Website URL)
http://www.sumitomotrust.co.jp/STA/retail/service/daiko/index.html
Agent : The Sumitomo Trust & Banking Co., Ltd.
all branches throughout Japan
Stock Listing : Tokyo Stock Exchange,Osaka Securities Exchange

Please visit our website
for the latest investor relations information.

http://www.morita119.com

Osaka Head Office : 5-20, 5-Chome, Shojihigashi, Ikuno-ku,Osaka City,
Osaka, 544-8585
蕁 +81-6-6756-0100
Tokyo Head Office : 25-31, 3-Chome, Nishishinbashi, Minato-ku,
Tokyo, 105-0003
Made 100%
蕁 +81-3-5777-5777
from recycled paper.

http://www.morita119.com

Printed with soy ink Printed using
environment friendly soy ink.

Printed on recycled paper.